Posted on 01/15/2007 9:44:47 AM PST by Caleb1411
When I was a kid, I shoveled snow to make a few dollars. One time, a friend and I did a driveway for a grumpy old neighbor. We pooped out before all the snow was gone, and when we asked to be paid, the old man refused.
"You don't finish, I don't pay," he said.
We skulked off. But those were the rules of the marketplace. You wanna get paid, you gotta do the job. Simple enough, right?
Apparently not in corporate America, where CEOs regularly leave their companies in no better shape than when they got there, yet walk away with huge compensation packages — "golden parachutes" they are called, or, as us common folk refer to it, "stealing."
Robert Nardelli is the latest example. He's the 58-year-old CEO who got passed over for the top job at GE, so he jumped to Home Depot for a compensation package worth about $240 million.
Some might ask why a guy from the world of power turbines should be running the third-largest retailer in the country — but then, CEOs don't like to be questioned. They have cultivated an image of what Tom Wolfe once called "Masters of the Universe."
And if you can run the universe, Home Depot should be a snap, right?
Well, not so fast.
(Excerpt) Read more at jewishworldreview.com ...
Corporate corruption at its finest.
The marketplace should punish Home Depot for squandering the money of its investors.
And that is that.
This article criticizes Nardelli as a "greedy CEO" but that's ridiculous. He is not a CEO who performed badly, got fired, then said, "You know what? I'm not leaving unless you give me $100M! No, make that $200M! Oh, what the heck! I'm not leaving until you give me $240M!"
The Board of Directors hired the guy. They agreed to a certain compensation package. His time came, and they paid him what had been previously agreed upon.
How is the guy greedy? Far better to criticize the Board as dumb. And if the board is dumb, then they should be replaced by smarter people. Which begs the question: "How do you get smarter people to help run your company and make it successful?" Well, there is no easy answer, but one key ingredient is the willingness to pay top dollar.
There's so much inequity in the way corporate compensation is treated in the press. Look at Enron's Rebecca Mark. She was in a head to head battle with Skilling to succeed Ken Lay, and she lost out. She left the company shortly afterward and cashed out $80M in Enron stock during 2000. Many of the decisions she made and the ventures she directed were the big losers for Enron (water utilities, etc.) which gave an incentive for the offshore activities to mask their losses. Yet she has not been assessed any responsibility,, and as far as I know has not faced a civil suit. The press wanted to squeeze Enron as a story into a nice preconceived mold "male managers/executives bad, women whistleblowers are heroes" and they largely managed to do it. Except that many of the whistle blowers stayed with the company for a long time, taking down some nice coin, after they were first aware of improprieties.
Oy, don't get me started!
These guys sign contracts when they're hired.
If the contract doesn't have a clause regarding the CEO's performance or financial health of the company before the CEO resigns or something of that nature, it's stupid, but too bad.
The real culprits are the members of the Board of Directors who hire these bums at these exorbinant salaries and exit contracts.
The average shareholder should get enough likeminded people together and hold these elitists feet to the fire through the SEC and if that won't work through the court system.
Exactly. When the people elect a bad president you don't blame him. You blame the voters.
Same thing here.
It would be interesting to know how many of the board members of Home Depot are executives of other corporations on whose boards Nardelli serves.
Probably no need. Where I live Lowe's is eating Home Depot's lunch.
When are liberals going to complain about overpaid celebrities & music stars? Where's the outrage over someone like Travolta making $20 million a picture?
Unless you're a stockholder STFU. Ain't none of your business, commie.
Sounds like a typical Cindy Sheehan/John Kerry non sequitur: "Unless you lost a son in Iraq/fought in Vietnam, you have no right to express a view."
Why is it so rare on FR people are able to discern the difference between apples and oranges? Check your Sheehan quote book for a reply.
Methinks it's invariably the FReeper whose ox has been gored who doth protest too much.
If my team signs a rookie to a huge contract and he earns rookie of the year, hey, good investment. On the other hand, if you end up with a Ryan Leaf, bad investment. Either way they are both getting whatever money was guaranteed in their contracts. It's the owner's job to make sure his investments are wise.
Sounds like a typical Cindy Sheehan/John Kerry non sequitur: "Unless you lost a son in Iraq/fought in Vietnam, you have no right to express a view."
But it was such a graceful, erudite post. Aren't you impressed by his rhetorical prowess?
There lies the key to the problem -- the universe of people who have any chance of being on BODs is simply too small for the dynamics of the market to override individual mutual-backscratch manipulations, and they have erected institutional barriers against discipline by the larger marketplace. Effectively, it's a weaker form of the crony "capitalism" that messed up post-Soviet Russia.
Lots of other people get these things, but most of them file them in the circular file. Then they bitch about things the company does. Dumbasses...
Bitching about "corporate malfeasance" when you're a shareholder but not voting is kinda like bitching about the state of the nation and not voting. Worse yet is when people bitch and they're not even shareholders, it's none of their business...
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